Thursday, January 17, 2013

Australia’s Unemployment Rate–5.4% (Hello Newman)

The figures showed the seasonally adjusted unemployment rate shifting from 5.3% to 5.4%. The November figure was revised up from 5.2% to 5.3%, which sounds a big shift, but really it was just revised from 5.23% to 5.25%.

The trend figure was steady at 5.4% (the November 2012 figure was also revised up due to a bit of rounding)

A look at the past 12 months shows the obvious trend – up

So why did the unemployment rate go up?

Well in seasonally adjusted terms employment decreased 5,500 (0.0%) to 11,538,900. In trend terms employment went up by 7,000 jobs

But before we get to the breakdown into full-time and part time, male and female etc, let’s look at the states, because that provides a pretty good answer as to why the unemployment rate went up.

While the national seasonally adjusted job numbers fell 5,500, in Queensland alone there was a loss of 22,900 jobs.

Ouch.

It leads us to this glorious picture:

Yeah. Not pretty.

But look. Let’s be fair. The state employment data at a seasonally adjusted level is really quite erratic, and it if far best to look at the trend rate. And here Queensland actually did have employment growth – a whopping 0.0039%. And here’s how it and the rest of the states line-up:

Well done Campbell Newman and Tim Nicholls. All that austerity is working a treat.

Polytics on Twitter has noted the seriously dopey media release put out by Nicholls, and it deserves quoting:

Treasurer Tim Nicholls said the figures, while disappointing, were reflected in the Mid Year Fiscal and Economic Review which was released in December 2012.

“A weaker global outlook, including certainty about the US ‘fiscal cliff’ and a decline in commodity prices, has seen business remain cautious which has led to a weakening in labour market conditions in Queensland,” Mr Nicholls said.

“This is reflected right across Australia, with 5,500 jobs lost nationwide in December.

So an LNP treasurer is quoting MYEFO to defend his own job numbers! Well yes, I can see why he would… but given everywhere else seemed to be able to cope, it doesn’t really hold much water. And you have to give points to his media team – it’s always good to mention the national jobs loss figure when your own state figure is over 4 times that number! But he did find some sunshine:

Mr Nicholls said the seasonally adjusted estimates seemed volatile and it was important to look at trend figures.

“The trend is much more stable and shows 100 new jobs in December,” he said.

Yep. 100 new jobs. Wow. It’s the boom state!!

OK lets look how Australia would be doing if we ditched QLD (and each of the other state for reference):

Were it not for the successful work of Newman and Nicholls Australia would have an unemployment rate of 5.1%.

This leads to QLD being a drag on the national rate well beyond that of any other state:

And it leads to this difference between the QLD unemployment rate and the national figure:

Try and spin that one into a success for austerity.

***

Having spent a bit of time looking at climate change data anomalies from averages, I thought about looking at the unemployment rate in the same way. So I’ve graphed the unemployment rate compared to the 1978-1998 average (so less than zero means the rate is below that average – which is 8.1%)

What it does show is how nice we are doing.

But if you look at the anomaly of annual employment growth from that 1978-1998 average (1.8%) we see a different picture:

Our current employment growth is pretty weak – below average in fact, and certainly no sign of any warming….

***

OK back to this month’s figures. The employment numbers break down in seasonally adjusted terms as:

The trend growth is staying positive, mostly on the back of the big jump in the May and September 2012 figures. This decline in full time jobs has not surprisingly led to an increase in the unemployment rate of people looking for full-time work:

A look at the difference between the two in trend terms shows a slight narrowing:

Any narrowing of this measure is good because a look over the past 30 years shows when the 2 rates are close, the economy is doing well (and when the looking for FT unemployment rate is below the national rate we’re likely in overcooking territory:

Now my favourite measure of how the labour market is fairing is trend growth in hours worked. It shows a slight increase, but until it gets over 0.2%. we can still describe it as weak.

Interestingly – especially given the drop in full time work, in trend terms men’s employment growth has now overtaken women’s:

The employment to population ratio continue its long decline from the peak of April 2008.

It is now at the point it was during the GFC, and yet we are clearly not in a panic stage of a GFC style recession. That in itself displays how the labour market has changed.

7 comments:

I have the most clapped out, rusty, falling apart horse trailer you’re ever likely to see. Whenever I take my daughter and her horse to equestrian events it’s a pretty humiliating drive of shame as we enter the parking area alongside all the flashy, glistening trailers painted to match the Range Rovers they’re attached to.

Very rarely, however, we show up at some rural showground in the back of beyond and we spot one miserable, pathetic looking hand-painted dog-box being passed of as a horse trailer and I turn to my daughter with pride and say “Honey, today is a good day. Today we don’t have the worst trailer here.”

She gives me a high-five and we drive in with our heads held high.

Today we much maligned Tasmanians, one and all, can hold our heads high and say “Thank you Queensland.”

Greg - or anyone else, for that matter - would you be kind enough to maybe link a good article/essay regarding trend unemployment? I have a brief understanding of it but I would like to gain a deeper knowledge.

Also, is there any explanation as to why - between Aug. 08 and Apr. 09 - there is such a huge gulf in trend growth of women vs. men?